Vanguard today announced plans to add an international bond fund to Vanguard Target Retirement Funds and other all-in-one funds. The move is expected to further diversify these broad, balanced portfolios.

The planned new holding is Vanguard Total International Bond Index Fund, which Vanguard expects to launch by the end of the second quarter. It will complement the three other core holdings of Vanguard's all-in-one funds: Vanguard Total Stock Market Index Fund, Vanguard Total International Stock Index Fund, and Vanguard Total Bond Market II Index Fund.

The Total International Bond Index Fund will be added to the 12 Target Retirement Funds, four Vanguard LifeStrategy® Funds, two Vanguard Managed Payout Funds, and two insurance portfolios. Each of these funds of funds will apportion 20% of its fixed income allocation to the Total International Bond Index Fund.

In addition, Vanguard Short-Term Inflation-Protected Securities Index Fund (Short-Term TIPS Fund) will replace Vanguard Inflation-Protected Securities Fund in the three Target Retirement Funds that offer exposure to TIPS. The Short-Term TIPS Fund is expected to increase inflation protection while reducing volatility for that portion of the portfolios.

The current allocations to Vanguard Prime Money Market Fund in the Target Retirement Income and Target Retirement 2010 Funds will be eliminated and reallocated to the other fixed income components.

The overall strategic asset allocation and glidepath of the Target Retirement Funds will not change. The addition of hedged international bonds represents a refinement of the funds' fixed income component, bringing long-term diversification benefits. An allocation to short-term TIPS provides retirees and pre-retirees with improved inflation protection with less volatility.

The changes to the Target Retirement Funds will also apply to the Target Retirement Trusts.

The expense ratio of the LifeStrategy Income Fund has the potential to increase by an estimated one basis point because of the changes. The expense ratios of all the other affected funds are expected to be unchanged.

Learn more

You can find videos and other information related to the Target Retirement Fund changes and the new fund at our Refinements to Vanguard Target Retirement Funds web page.

If you would like more information, please contact your relationship manager.

I suppose yields are a tad hire internationally and it gives another level of bond diversification. I have been using the PIMCO Foreign Bond (USD hedged) for a while, now I have to decide if I should switch or not.

“Never ask anyone for their opinion, forecast, or recommendation. Just ask them what they have—or don’t have—in their portfolio.” -Taleb

The shared prospectus for the Target Retirement funds has already been amended to show the new asset allocations. It can be viewed and downloaded by clicking on the "View prospectus and reports" link from Vanguard's home "Overview" page for any fund in the series, such as:

Vanguard Target Date Funds are "set it and forget it" funds until Vanguard changes its mind. In that sense, they are just a different version of a managed fund, where the manager (Vanguard) can change the allocation at any time. Not enough stocks, change the allocation. No tips, change the allocation. No international, change the allocation. No international bonds, change the allocation. Wrong tips, change the allocation. It's really "set it and watch it change before your very eyes."

I think sscritic and Taylor/Morningstar (above) are both right, although looking at the situation from different angles.

Over the years, Vanguard has made multiple changes in the Target Retirement funds, so that anyone who originally bought these when they were newly available is simply not looking at the same underlying fund composition today.

I think a good argument can be made that the changes were in the direction of improvement, but sscritic's point is undeniable that anyone who thought the allocation was fixed has experienced several surprises.

In this sense, the Target funds, although composed mainly of index funds, have actually been less stable/predictable in their long-term allocations than actively managed funds like Wellington or Wellesley--but, on the other hand, those two funds aren't as diversified concerning bond types and foreign stock exposure.

Last edited by beardsworth on Thu Feb 07, 2013 6:15 am, edited 1 time in total.

Sheepdog wrote:Stay the course? Not Vanguard. This is the second time the Target fund's allocation and/or investments have changed since they started less than 10 years ago.

Third time. Not sure when, but one time they increased the stock percentage then a year or two ago increased international stocks from 20-30% (of stocks). I wonder what the next change will be in a year or two... I hope admiral shares.

mikep wrote:I wonder what the next change will be in a year or two... I hope admiral shares.

Admiral Shares in Target Retirements would really change the way I invest, since I more or less replicate it with Admiral Funds. It would mean less work rebalancing and even more hands off!

I think Vanguard should add Admiral Shares in Target Retirements to help people Stay the Course, and to prevent people from fiddling unnecessarily with their allocations. It might even help Vanguard save some money, since people might go in and out of funds less.

mikep wrote:I wonder what the next change will be in a year or two... I hope admiral shares.

Admiral Shares in Target Retirements would really change the way I invest, since I more or less replicate it with Admiral Funds. It would mean less work rebalancing and even more hands off!

I think Vanguard should add Admiral Shares in Target Retirements to help people Stay the Course, and to prevent people from fiddling unnecessarily with their allocations. It might even help Vanguard save some money, since people might go in and out of funds less.

+1

I'm a 3-fund portfolio guy + REITs, I like the Target Date funds but if I can get 6 bps for TSM Admiral and 10 bps for TBM Admiral my weighted ER is less than 10 bps. TDFs at Vanguard right now are 18 bps. I figure over the next 35 years savings those 8 bps will generate decent savings.

Most of the comments seem focused on the revisions to the Target Retirement funds. Funny thing is, my first impression was that Vanguard is more concerned about the potential benefits for the new, tiny niche fund offerings than they are about improving the performance of the Target Retirement funds.

The addition of the Total International Bond Index, "expected to further diversify these broad, balanced portfolios," will probably have an inconsequential effect on the huge, well established funds. Just 10 years out from retirement, this move will swap out 20% of a 32.5% fixed income allocation, or 6.5% of the portfolio, with another variety of relatively low risk fixed income index fund. Hardly something to get excited about.

On the other hand, the huge and immediate infusion of cash into a new fund that will probably attract only a small percentage of investors -- and even those only very slowly -- will give the new offering a huge head start towards creating a halfway decent asset base.

sscritic wrote:Vanguard Target Date Funds are "set it and forget it" funds until Vanguard changes its mind. In that sense, they are just a different version of a managed fund, where the manager (Vanguard) can change the allocation at any time. Not enough stocks, change the allocation. No tips, change the allocation. No international, change the allocation. No international bonds, change the allocation. Wrong tips, change the allocation. It's really "set it and watch it change before your very eyes."

You are so right on this. I currently do not have any of these life strategy or target retirement funds but had been considering simplifying in retirement accounts. Nope. The idea was set and forget and now it's "what did they do now"? I have no interest in owning international bonds whether I should want to or not.

I have posted on many threads over the last year that I expected Vanguard to add this fund to the Target and Life lineup. With these offereings including "Total" funds, why would anyone be surprised?

After reading David Swensen's thoughts on international bonds in his awesome investing book, Unconventional Success, I have no plans to invest in this fund. If I remember correctly, Rick Ferri posted a thread a while back that based on his contacts at Vanguard, none of the "heavy hitters" would be investing their personal funds in this offering. I am going to follow this lead.

I will say I would love to hear Mr. Bogle's thoughts on this new offering. Perhaps he will have an interview or article soon enough to provide some additional perspective and great insight.

To me at the end of the day, bonds are for safety. I live in the US. I work in the US. I spend dollars in the US. I will retire in this great country. Why would I want to introduce foreign inflation, credit, monetary, etc. risks into my portfolio?

John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" |
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Disclosure: Three Fund Portfolio + U.S. & International REITs

mikep wrote:I wonder what the next change will be in a year or two... I hope admiral shares.

Admiral Shares in Target Retirements would really change the way I invest, since I more or less replicate it with Admiral Funds. It would mean less work rebalancing and even more hands off!

I think Vanguard should add Admiral Shares in Target Retirements to help people Stay the Course, and to prevent people from fiddling unnecessarily with their allocations. It might even help Vanguard save some money, since people might go in and out of funds less.

+1

I'm a 3-fund portfolio guy + REITs, I like the Target Date funds but if I can get 6 bps for TSM Admiral and 10 bps for TBM Admiral my weighted ER is less than 10 bps. TDFs at Vanguard right now are 18 bps. I figure over the next 35 years savings those 8 bps will generate decent savings.

8bp for a couple maxing out 401k and Roth IRAs for 35 years is hundreds of thousands of dollars. 8bp matters.

abuss368 wrote:I have posted on many threads over the last year that I expected Vanguard to add this fund to the Target and Life lineup. With these offereings including "Total" funds, why would anyone be surprised?

After reading David Swensen's thoughts on international bonds in his awesome investing book, Unconventional Success, I have no plans to invest in this fund. If I remember correctly, Rick Ferri posted a thread a while back that based on his contacts at Vanguard, none of the "heavy hitters" would be investing their personal funds in this offering. I am going to follow this lead.

I will say I would love to hear Mr. Bogle's thoughts on this new offering. Perhaps he will have an interview or article soon enough to provide some additional perspective and great insight.

To me at the end of the day, bonds are for safety. I live in the US. I work in the US. I spend dollars in the US. I will retire in this great country. Why would I want to introduce foreign inflation, credit, monetary, etc. risks into my portfolio?

1) well the currency risk is hedged. so that means there is not direct impact from foreign inflation. Foreign inflation risk is mostly "currency risk"- the risk that say Norway has high inflation and their currency loses value accordingly. That's not to say there is no risk from foreign inflation. In a bad hyperinflation scenario, a country may have political unrest and end up defaulting on its bonds. Think Weimar republic.

2) Credit risk- agree this is an issue. in theory you get paid for it? (spain etc.) not so much in the case of japan. again i agree this is an issue.

3) monetary risk- in theory this is diversifying, and is one of the main arguments why foreign hedged bond funds can make some sense for a US investor. The idea is that you already have a lot of risk to US monetary policy (fed raising short and long term interest rates). Foreign monetary policy may/should not move in lockstep (they may be cutting rates when we are raising ours) which is supposed to be a good thing.

sscritic wrote:Vanguard Target Date Funds are "set it and forget it" funds until Vanguard changes its mind. In that sense, they are just a different version of a managed fund, where the manager (Vanguard) can change the allocation at any time. Not enough stocks, change the allocation. No tips, change the allocation. No international, change the allocation. No international bonds, change the allocation. Wrong tips, change the allocation. It's really "set it and watch it change before your very eyes."

Exactly! Too much tinkering can ruin a good meal.

If a retiree's objective is to protect against long term inflation, what benefit will holding short-term Tips provide?
International bonds are another story all together - hedging currency adds cost. Not so sure of the benefits of holding International bonds when your home currency is US dollars, the world comes here in times of turmoil not overseas.

Rodc wrote:If inflation is a concern, it is mostly a long term concern. Why would one want short term TIPS?

Didn't see your post, but my thoughts exactly - seems they are trying to have their cake and eat it, that almost never works out the way one thinks it should. The risk in retirement is longer term inflationary impacts on your assets, short-term Tips may provide some imaginary liquidity (say this because US Treasury Tips market is liquid) or are they thinking that deflation is in the cards? If deflation, hold nominals.

abuss368 wrote:After reading David Swensen's thoughts on international bonds in his awesome investing book, Unconventional Success, I have no plans to invest in this fund.

Just pulled this down off the shelf and thought I'd add a few quotes from Swensen:

By asset size, foreign-currency-denominated bonds represent a formidable market, falling just short of the aggregate market value of U.S.-dollar-denominated debt. Yet, in spite of the market's size, foreign bonds offer little of value to U.S. investors.

Consider bonds of similar maturity and similar credit quality, with one denominated in U.S. dollars and the other denominated in foreign currency. Because monetary conditions differ from country to country, the two bonds would likely promise different interest rates. An investor might expect that different interest rates and different economic conditions would lead to different investment results. If, however, the investor hedges each of the foreign bond's cash flows by selling sufficient foreign currency in the forward markets to match the anticipated receipt of interest and principal payments, then the U.S. dollar cash flows of the dollar-denominated bond match exactly the U.S. dollar cash flows of the foreign-currency-denominated bond hedged into U.S. dollars.

Fully hedged foreign bonds mimic U.S. bonds (with the disadvantage of added complexity and costs stemming from the hedging process)... Foreign-currency-denominated bonds play no role in well-constructed investment portfolios.

As some of the posters have alluded to, the best part of all this besides the obvious increased diversification IMHO is the reduced duration in the TR funds due to changing the TIPS fund to short term TIPS. That, and the decrease in the allotment to MM funds, make this a win/win IHMO, especially since I am 100% TR Income (VTINX).

NOTE: Just saw this thread after I posted the above to the other thread regarding the new Total International Bond Fund, but I think this is a better venue for my post. Sorry for the duplication.

Rodc wrote:If inflation is a concern, it is mostly a long term concern. Why would one want short term TIPS?

Didn't see your post, but my thoughts exactly - seems they are trying to have their cake and eat it, that almost never works out the way one thinks it should. The risk in retirement is longer term inflationary impacts on your assets, short-term Tips may provide some imaginary liquidity (say this because US Treasury Tips market is liquid) or are they thinking that deflation is in the cards? If deflation, hold nominals.

Hi Rodc, Grt2bOutdoors,

Short-term TIPS are inflation-adjusted to exactly the same degree as longer-term TIPS. Both of Vanguard's funds roll their bonds, of course, so the inflation protection is ongoing.

Expectantly, the short-term TIPS fund should have a closer correlation to current inflation; less interest rate risk (in this case, real interest rates); and lower long-term returns because it will not earn the term premium.

Thinking that the short-term TIPS fund does not protect itself against inflation as well as the longer-term fund is a misconception.

There may well be reasons to avoid short-term TIPS, but what you've mentioned isn't among them.

I doubt it will get Mr. Bogle's blessing. He still does not invest in international equities. I will stick to the plain vanilla Balanced Index Fund. This is where Mr. Bogle saves for his Grandchildren. I don't particulary like how Vanguard keeps changing the Target Retirement Funds. It kind of makes me uncomfortable because I feel there is a part of it that they feel they have to keep up with what the other fund families are doing.

stemikger wrote:I doubt it will get Mr. Bogle's blessing. He still does not invest in international equities. I will stick to the plain vanilla Balanced Index Fund. This is where Mr. Bogle saves for his Grandchildren. I don't particulary like how Vanguard keeps changing the Target Retirement Funds. It kind of makes me uncomfortable because I feel there is a part of it that they feel they have to keep up with what the other fund families are doing.

The flip side of this is that the TR funds especially are designed to be set-it-and-forget it options and just trust the fund company. If VG never updates its funds and people fall behind compared to the more current thinking used by others then will people be upset. I guess they could try offering new series of TR funds, e.g. TR 2035 Series I, Series II, etc. and close them to new investors but that would become messy...

Lastly if you don't like the TR funds you can roll your own. I find the changes to the LS funds a bit odder.

abuss368 wrote:After reading David Swensen's thoughts on international bonds in his awesome investing book, Unconventional Success, I have no plans to invest in this fund.

Just pulled this down off the shelf and thought I'd add a few quotes from Swensen:

By asset size, foreign-currency-denominated bonds represent a formidable market, falling just short of the aggregate market value of U.S.-dollar-denominated debt. Yet, in spite of the market's size, foreign bonds offer little of value to U.S. investors.

Consider bonds of similar maturity and similar credit quality, with one denominated in U.S. dollars and the other denominated in foreign currency. Because monetary conditions differ from country to country, the two bonds would likely promise different interest rates. An investor might expect that different interest rates and different economic conditions would lead to different investment results. If, however, the investor hedges each of the foreign bond's cash flows by selling sufficient foreign currency in the forward markets to match the anticipated receipt of interest and principal payments, then the U.S. dollar cash flows of the dollar-denominated bond match exactly the U.S. dollar cash flows of the foreign-currency-denominated bond hedged into U.S. dollars.

Fully hedged foreign bonds mimic U.S. bonds (with the disadvantage of added complexity and costs stemming from the hedging process)... Foreign-currency-denominated bonds play no role in well-constructed investment portfolios.

3) turning to his 2nd paragraph above, and the first sentence of the 3rd paragraph all of those things he says are true. Yet his last sentence does not necessarily follow. Rather than hedging each of the foreign bonds future cash flows into dollars (this is called a currency swap-he calls it "fully hedging") the thing to do is to hedge using short-dated currency futures/forward contracts (say 1 month). That hedges out the currency risk but not the foreign yield curve risk. Having exposure to different foreign yield curves is diversifying since foreign yield curves may not move in lockstep with the US yield curve. This is the currency hedging strategy that I think the Vanguard fund is planning to employ.

His point about the cost of currency hedging is a valid one. But currency hedging is not always expensive. The best guide to the cost of foreign currency hedging is the yield of foreign short term interest rates vs. us short term interest rates. Here are two examples right now:

a) Australian tbills are yielding 3% whereas US Tbills are yielding zero. So the cost of hedging out australian currency risk is 3%. Ouch!

b) Euro: German tbills are yielding zero just like US tbills. So the cost of hedging out the Euro is effectively zero.

I am sympathetic to Swensen's argument that currency hedged foreign bonds mostly don't make sense. There are exceptions though. If there was a high quality country with low tbill yields (so low hedging cost) but high long term rates (so high expected return), then that would be ideal. Good luck finding that though right now!

sscritic wrote:Vanguard Target Date Funds are "set it and forget it" funds until Vanguard changes its mind. In that sense, they are just a different version of a managed fund, where the manager (Vanguard) can change the allocation at any time. Not enough stocks, change the allocation. No tips, change the allocation. No international, change the allocation. No international bonds, change the allocation. Wrong tips, change the allocation. It's really "set it and watch it change before your very eyes."

In all fairness, I think it's less a failing on Vanguards part then a reflection of the probable impossibility of consensus about target funds in general. Not that there is anything inherently wrong with them, 80% of the population could probably retire just fine on a target fund if they put a reasonable amount in. Given the depth and breadth of what they are supposed to accomplish though, it's hardly surprising that no clear and permanent definition of what it should do, or how it should do it, exists.

What are the risks of international bonds as opposed to international stocks? If you wanted to increase your internal allocation in your portfolio, you now have the option of doing it in two places. Your fixed allocation or your equity allocation. Where should you increase it and what should your thinking process be in determining which is right for your portfolio?

Juniormint wrote:What are the risks of international bonds as opposed to international stocks? If you wanted to increase your internal allocation in your portfolio, you now have the option of doing it in two places. Your fixed allocation or your equity allocation. Where should you increase it and what should your thinking process be in determining which is right for your portfolio?

I think those are the right questions to be asking. Let me answer by way of example. The international bond fund will have a heavy weight towards japanese government bonds (JGBs). 10 year JCGs are currently yielding 0.77%. thats not much return for the interest rate risk of a 10 year bond.

sscritic wrote:Vanguard Target Date Funds are "set it and forget it" funds until Vanguard changes its mind. In that sense, they are just a different version of a managed fund, where the manager (Vanguard) can change the allocation at any time. Not enough stocks, change the allocation. No tips, change the allocation. No international, change the allocation. No international bonds, change the allocation. Wrong tips, change the allocation. It's really "set it and watch it change before your very eyes."

Hi sscritic, At one point, I know they increased the proportion of stocks devoted to international markets. Did they ever change the stock/bond split (except for the gradual changes programmed into the funds over time based on the investors getting older)? If so, do you or anyone else know what was the change exactly? Thanks. Best, Neil

sscritic wrote:Vanguard Target Date Funds are "set it and forget it" funds until Vanguard changes its mind. In that sense, they are just a different version of a managed fund, where the manager (Vanguard) can change the allocation at any time. Not enough stocks, change the allocation. No tips, change the allocation. No international, change the allocation. No international bonds, change the allocation. Wrong tips, change the allocation. It's really "set it and watch it change before your very eyes."

Hi sscritic, At one point, I know they increased the proportion of stocks devoted to international markets. Did they ever change the stock/bond split (except for the gradual changes programmed into the funds over time based on the investors getting older)? If so, do you or anyone else know what was the change exactly? Thanks. Best, Neil

docneil88 wrote:At one point, I know they increased the proportion of stocks devoted to international markets. Did they ever change the stock/bond split (except for the gradual changes programmed into the funds over time based on the investors getting older)? If so, do you or anyone else know what was the change exactly? Thanks. Best, Neil

According to the tables in the wiki, in 2003 the bond allocation for the 2025 TR fund (22 years away from target date) was 40% bonds, but by 2008 (after the 2006 revision) the 2030 TR fund (again, 22 years from target date) had a bond allocation of only 14.7%. That's over a 25% portfolio shift!

(The market reached its pre-Great Recession peak about a year and a half later. Not good timing.)

It would be interesting to compare the actual performance of the funds to the theoretical performance they could have achieved if they had "stayed the course." (Though obviously the time period of such a comparison is still quite short.)

While I am not fond of the TR funds changing regularly; I also think the alternative of the TR funds never changing could be equally bad, especially as research and thinking about these types of funds changes.

Say when the TR were planned in 199x it was thought that Intl equity exposure should be quite low because of reasons X, Y, Z. Then as the research develops a range of 20-40% comes into more generally accepted view. Should the TR funds stay static? Or should they adopt because of new reasons X', Y', Z'? How long do they have to wait before making changes? Or can they only make changes for un-introduced years, so TR and TR 2020-2060 stay static but unintroduced 2065 will get the change when it is created?

If they stay static would you propose that VG offer a nearly identical set of TR funds with the new philosophy the proliferating offerings and years? Or just let their offering remain resting on old research?

I do understand the complaint but if you are at least willing to acknowledge that the thinking on the TR fund composition can change due to research, what would you propose???

JamesSFO wrote:
Say when the TR were planned in 199x it was thought that Intl equity exposure should be quite low because of reasons X, Y, Z. Then as the research develops a range of 20-40% comes into more generally accepted view. Should the TR funds stay static?

There have been no seminal articles in the financial literature which have informed the VG TR Fund asset allocation changes. The first change (made not long after they were first introduced) was because VG's TR Funds were trailing competitors who had higher equities % (thus dramatically affecting asset allocations of shareholders). The change increasing the % int'l stocks was not based upon any "new" data on international stock allocation.

“The only place where success come before work is in the dictionary.” Abraham Lincoln. This post does not provide advice for specific individual situations and should not be construed as doing so.

JamesSFO wrote:
Say when the TR were planned in 199x it was thought that Intl equity exposure should be quite low because of reasons X, Y, Z. Then as the research develops a range of 20-40% comes into more generally accepted view. Should the TR funds stay static?

There have been no seminal articles in the financial literature which have informed the VG TR Fund asset allocation changes. The first change (made not long after they were first introduced) was because VG's TR Funds were trailing competitors who had higher equities % (thus dramatically affecting asset allocations of shareholders). The change increasing the % int'l stocks was not based upon any "new" data on international stock allocation.

I think you may be correct on the first change.
Re the second change (moving from 20% international to 30% international) I don't think you are correct. They had published some research supporting the idea that 30% was a more optimal international allocation than 20%. See this link and page 5 for a more recent publication- not sure if the original white paper (at the time of the shift) is still available.https://advisors.vanguard.com:443/VGApp ... sinvesting

John Maynard Keynes famously stated, "When my information changes, I alter my conclusions." If a new relevant fund appears, why should not Target-Retirement funds adjust their composition? The strategy set it and forget it works far better than market timing and speculation. Appropriate strategic adjustments work better than set it and forget it.

I have no idea to what extent the new fund is appropriate, but the animosity to it in this thread seems to exceed any possible harm the fund may cause.

Victoria

WINNER of the 2015 Boglehead Contest. |
Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

VictoriaF wrote:John Maynard Keynes famously stated, "When my information changes, I alter my conclusions." If a new relevant fund appears, why should not Target-Retirement funds adjust their composition? The strategy set it and forget it works far better than market timing and speculation. Appropriate strategic adjustments work better than set it and forget it.

I have no idea to what extent the new fund is appropriate, but the animosity to it in this thread seems to exceed any possible harm the fund may cause.

VictoriaF wrote:John Maynard Keynes famously stated, "When my information changes, I alter my conclusions." If a new relevant fund appears, why should not Target-Retirement funds adjust their composition? The strategy set it and forget it works far better than market timing and speculation. Appropriate strategic adjustments work better than set it and forget it.

I have no idea to what extent the new fund is appropriate, but the animosity to it in this thread seems to exceed any possible harm the fund may cause.

Victoria

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Although I believe one can argue the changes made to the Target-Retirement funds were improvements, the problem for some of us on this board is how we wanted to use them.

Even with the prospects of future changes the funds are excellent choices for people who do not want to pay close attention to their investments. I have and continue to recommend them to my friends who do not want to follow their investments closely.

However, there two cases on this board that the constant changing presents a problem. The minor one is the one that most directly affects me. I was trying to include the funds as base funds and add other funds to give me the mix of stocks/bonds, U.S./international, large/small that I wanted. The constant changing makes that difficult - particularly leaves me concerned that if something happened to me and they made major changes, my wife would not have the portfolio I had set up. With the first change I started restricting our use of the funds, with the second my wife said to drop them.

The other bigger problem with their constant changing is that many on this board recommend people pick the funds based upon their stock/bond ratio fitting their needs instead of based upon their age. Vanguard regularly improving the funds works very well for those who buy the funds to have a simple portfolio based upon their age, but for those who buy based upon the recommendations of this board they could very well end up with a portfolio that does not match their goals. Perhaps the better solution is for the board members to stop recommending the funds based upon current settings and instead suggest them or not suggest them based upon their use if they fit ones age and not ones portfolio goals. If someone's goals do not fit the use of the Target Retirement funds based upon ones age, we should perhaps help the person set up their own unique portfolio using other funds and forget about the desire to stay simple if they are not comfortable with Vanguard deciding what their holdings are based upon their age.